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Examples :: Business Letters :: Business letter basics

Business letters: The basics

The business letter, in whatever form, is a vital part of any business.

In your business, everything you do, every dispute, every commitment, is made in writing.

The business letter must be considered to be a prima facie legal document.

On the basis of your letters, people take action. They commit their time and their money. Their legal rights are involved. Whether it's a letter of complaint, a request for payment, or anything related to your business, you're dealing with the property and entitlements of other people.

Because of the nature of business, anything in writing is considered to be proof of intent. All business is based on tangible things. Even a typo can be dangerous. In many cases, it's better not to go in writing at all, until you're sure of your facts and have checked your own information.


Order to printer:

1000 memo pads with letterhead.
10000 With Compliments slips with letterhead.
10000 envelopes with letterhead.
50000 A4 sheets, with letterhead.

The printer fills the order, and is informed that the client meant 5000 A4 sheets. The client can't pay for the order. The printer is severely out of pocket, because of the volume of materials. Those extra 45,000 sheets will have cost him approximately $2,500 dollars in production costs and materials, and he now has 100 reams of paper that he can't resell, because of the letterhead. He's also now short of paper for other orders, and has to spend more to replace the wasted paper.

Naturally, the two parties also continue their dispute in writing. So begins a series of errors which would be hilarious, if they didn't happen every day to every business on Earth.

The printer is a reasonable person, and has an idea:

It is suggested under the circumstances that purchase of the extra 45,000 sheets could be conducted over time, in accordance with your needs for stationery.

For the record, this is a perfectly reasonable idea. The printer won't lose out on the deal, and the client has a ready made supply of stationery.

The client, however, is suspicious of the idea of buying over time. This is a new business, and they're not thinking in terms of years ahead. The reply is understandable, but helps nothing:

Please advise on what time frame you anticipate these purchases to be made.

The printer, innocently, replies:

Perhaps over a period of two years, as a ballpark figure.

The client's calculator figures out this is about $2000 a year at their purchase price. They don't have many customers yet, they have a bank loan to pay off, and they're not keen on committing to anything:

Unfortunately we are unable to commit to this offer due to our current cashflow considerations. We will be happy to consider any alternate arrangement, in a longer time frame.

The printer is by now aware he's not getting very far. He's also not happy with the fact that he's likely to have masses of paper cluttering up his workplace for several years, even if he can talk them into the offer. He stops short of an actual declaration of war:

We are obliged to mention that this firm incurred a considerable expense in the production of these materials, and must seek cost recovery….

The client won't budge, and can't really commit.

From then on, it's up to the lawyers. Both firms lose money. The client's budget is wrecked by the legal fees, and the printer makes a loss for the year. The business letters are proof of the client's mistake, and failure to negotiate a settlement.

This is what one business letter can do to you.

Basic requirements for the content of a business letter:

  • Clarity.
  • Information quality.
  • Content checking.
  • Attention to legal issues.
  • Costing.


The best way to be clear is to be brief. Less is better, in most business letters.

Always make exact statements. Use simple sentences. You need to be certain the letter says what you mean, and what you want it to say.

Do not include any information which is capable of being misinterpreted. You're not writing a romance, you're writing part of your income.

Information quality.

Make certain of your facts, before writing anything.

Do not, ever, put in writing anything where you are in any way uncertain of your own information.

Check, double check, and check again. If you're not sure about something, do not include that information, or anything related to it.

Content checking.

Whoever drafts the business letter, double check the contents. If you're in a large organization, always have a way of ensuring all correspondence is checked. This is very like accountancy, quality control, where a series of checks and balances is used to ensure accuracy.

Attention to legal issues.

All business correspondence has a legal element in it. Your letter can wind up in a court as evidence against you.

  • Write every letter as if you were talking to a lawyer or a policeman.
  • Do not make statements or commitments without checking consideration and costing as detailed below.
  • Don't write business letters when you're in a feeling sick, or unable to focus because you're too busy to think about what you're writing.
  • Do not have Hollywood style executive tantrums in writing. Don't threaten anyone with anything, and don't make offensive or abusive remarks. One stupid remark can cost you your business.


Costing of a business letter means literally figuring out how much the contents of the letter are worth to you.

If the business value is high, you'll find you become far less casual about writing the letter.

The real cost of any business letter is the value of the client or supplier to your business. Mistakes in business tend to be expensive.

Standardized business letters

We discuss in our piece on Business Letter Formats the fundamentals of business correspondence and how to set up your standardized letters as macros with ready made text and references.

Standardized correspondence is extremely useful in reducing the possibility of errors in your materials. Everybody will learn which letters are required for what, and because they know the format, they will spot any errors or omissions a lot more efficiently.

Pro forma letters are also a good way of maintaining your records, whether you're using hard copy or email for your correspondence.

Just remember one thing about business letters generally:

Where they go, your business goes.


Please note:

  • This text is intended for advisory and guideline purposes only.
  • Any business letter can become a legal document, so check your content properly before issuing.
  • Any executable or statutorily defined document should be checked for compliance with legal requirements, and you should seek legal advice regarding its contents.